![]() The term "compound interest" is usually used for accounts that pay a set, guaranteed interest rate (like a savings account). When you have money in a savings account that earns interest, you receive interest on the amount you deposit and the interest you earned from the previous period. The snowball starts small, but as it keeps rolling, its momentum builds and it grows bigger and bigger. ![]() Think of it like a snowball rolling down a hill. Your money compounds when you earn interest or returns on money that’s already earned interest or returns. ![]() ![]() Start saving and investing today with Acorns Compounding is often described as “interest earned on interest,” and can help grow investors’ money quicker.īut you’ve got to understand compounding to really be able to take advantage of it. ![]()
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